Nigeria’s Economy – a flyer with a front and a back side
NIGERIA’S ECONOMY
Rich in Oil – But Is That Enough?
123 million
people lived in extreme poverty in 2025 – more than half of the population.1
English LK Q2 · Lejs, Sami & Leo · 6 November 2026
Nigeria at a Glance
- Location
- West Africa, on the Gulf of Guinea3
- Capital
- Abuja, capital since 1991, 4+ million inhabitants3
- Area
- about 924,000 km² 3
- Languages
- English as official language, plus Hausa, Yoruba, Igbo, Ijaw and many more3
- Currency
- naira3
- Political system
- federation of 36 states; President Bola Ahmed Tinubu since May 20231
- Natural resources
- petroleum, natural gas, tin, iron ore, coal, arable land and more3
West Africa’s heavyweight: about 70 % of the economic output of the 15 ECOWAS countries.2
How Nigeria Earns Its Money
Many think of oil first – but agriculture employs nearly 70 % of the population and produces about a quarter of GDP, mostly as subsistence farming by hand.2
The fastest-growing sector is the digital economy: almost 20 % of GDP in Q2 2024 – nearly four times as much as oil. Nigeria is a hub for fintech start-ups.2
The big obstacle: infrastructure. Of about 12,900 MW of power capacity, only 4,500 MW actually work, and most of the 50,000 km of roads are unpaved.2
- 4,500 MW electricity actually available
- 40,000 MW electricity needed
- 20 % of roads are paved2
Oil: Blessing or Curse?
Nigeria joined OPEC in 1971 and is one of Africa’s leading oil producers.2,3 Oil is a small part of GDP but a big part of the state’s income – when oil prices drop, the budget suffers at once.2
- about 6 % of GDP comes from oil
- 29 % of government revenue comes from oil2
The paradox: Nigeria exports crude oil but imports much of its refined fuel. Until 2023, a costly subsidy kept petrol cheap.2
Oil firms also face pipeline vandalism, crime, conflicts with host communities and environmental damage.2
Think about it: Why does a country that exports crude oil have to import petrol?
Reforms and Their Price
In 2023, President Tinubu let the naira float and scrapped the fuel subsidy. Economists welcomed it – ordinary Nigerians paid the price.2
- Exchange rate
4001,700naira per US dollar, November 20242 - Petrol
1981,100naira per litre, October 20242 - Food32.7 %core food inflation, September 20242
Imports became expensive, and firms like Procter & Gamble, Unilever and GSK left or stopped producing locally.2
Poor households spend up to 70 % of their income on food, and 3.5 million people look for work every year – without enough jobs.1
First signs of recovery1
- Inflation: 27.4 % in March 2025 → 15.1 % in Feb. 2026
- Growth: 4.2 % in the first half of 2026
- Currency reserves: 51.9 bn US dollars, July 2026
- But: still too weak to create enough jobs
Who Is Working on It?
-
The World Bank
funds projects worth over 16.4 bn US dollars; its 2026–2032 plan aims at “more and better private sector jobs”.1
-
National Social Safety Net Program, NASSP-SU:
digital cash for over 42 million poor people – 94 % of regular recipients are women.1
-
Nigeria for Women Program, NFWP:
1 million+ women, 22,000+ savings groups, training and small grants.1
-
Electricity for everyone:
access from 45 % to 90 % by 2030, 30 % of new capacity renewable.2
-
African Continental Free Trade Agreement, AfCFTA:
signed in 2019 to boost African trade, but slow to put into practice.2
What’s Next?
- 4.4 % expected growth per year, 2026–2028
- 12 % expected inflation by 20281
Whether ordinary people benefit depends on investment, power, roads, education and jobs outside oil.1,2 The government bets on the digital economy and its young population.2
Can Nigeria turn its young people into its greatest resource – greater than oil?
Did You Know?
Between 2023 and October 2024, the price of a litre of petrol rose more than fivefold.2
In the second quarter of 2024, Nigeria’s digital economy contributed almost four times as much to GDP as oil.2
Every year, about 3.5 million Nigerians start looking for a job.1
Poor families in Nigeria spend up to 70 % of their income on food.1
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Sources
- World Bank Group (2026): Nigeria – Overview (sections “About”, “Economy”, “Development” and “Country Partnership”). Last updated 11 October 2026.
Online: https://www.worldbank.org/ext/en/country/nigeria (accessed 6 November 2026) - International Trade Administration, U.S. Department of Commerce (2025): Nigeria – Market Overview. Nigeria Country Commercial Guide. Last published 5 September 2025.
Online: https://www.trade.gov/country-commercial-guides/nigeria-market-overview (accessed 6 November 2026) - Organization of the Petroleum Exporting Countries (OPEC) (n.d.): Nigeria – Facts and Figures. Member Countries.
Online: https://www.opec.org/nigeria.html (accessed 6 November 2026)
Image credits: all photos from Wikimedia Commons – Lagos skyline: Jamie Tubers, CC BY-SA 4.0, cropped · map: Alvaro1984 18, public domain, recoloured and cropped · farmers: Mike Blyth, CC BY 2.5 · POS agent: Confidence24, CC BY-SA 4.0 · oil terminal: ---=XEON=---, CC BY 3.0 · tomato market: Ayorinde Ogundele, CC BY-SA 4.0 · solar panels: NigerianScribe, CC0 · laptop: IBORO, CC BY-SA 4.0.